Moody's: Oil, Gas Not Out of the Woods Yet

The energy industry’s measurement on Moody’s Investors Service liquidity stress index (LSI) has once again outdone itself. After hitting 5.8 percent in September, the highest level since October 2010, the LSI jumped to 6.1 percent in October, a figure not seen since March 2010.

The stress index has increased steadily – literally – with the stress that’s characterized the industry this year.

“The LSI has been trekking higher as the oil and LSI has jumped this year on the back of commodity-driven woes ripping through the energy sector,” Moody’s said in a Nov. 3 note to investors.

Take energy out of the equation, and the LSI is closer to 2.7 percent for October, just above the record low set in April 2013.

“There is definitely some upward pressure on the liquidity stress index, and it’s mostly confined to oil and gas,” John Puchalla, senior vice president at Moody’s, told Rigzone. “Our oil and team doesn’t think the sector is out of the woods yet. There are still some significant headwinds [facing the industry’s liquidity] … the borrowing base redetermination, rolling off hedges, and these are probably be going to put some pressure [on the sector] into 2016.”

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Deon Daugherty
Senior Editor | Rigzone
 -  The Rigzone Interview: Private Equity ... (Jul 13)
 -  Could Argentinian Politics Beat the Va... (Jul 10)
 -  The Rigzone Interview: Oil, Gas Goes D... (Jul 6)
 -  Deal Of The Month: EQT, Rice Energy Me... (Jun 30)
 -  OpEd: OPEC Production Cuts Fail, Marke... (Jun 27)


Most Popular Articles

From the Career Center
Jobs that may interest you
Project Accounting
Expertise: Accounting
Location: Houston, 
 
Senior Tax Accountant
Expertise: Accounting|Financial Audit
Location: Chesterfield, MO
 
United States Houston: Account Rep, Bus Dev
Expertise: Business Development|Marketing|Sales
Location: Houston, TX
 
search for more jobs

Brent Crude Oil : $59.02/BBL 3.79%
Light Crude Oil : $52.22/BBL 3.07%
Natural Gas : $2.92/MMBtu 1.31%
Updated in last 24 hours